Which Way Will Stocks Go in October? Marc Faber Weighs In
by Michael Bogan Beacon Equity
Investment guru and author of the Gloom, Boom and Doom report, Marc Faber, says go away in October and November, and come back after the selling reaches oversold levels in the coming weeks. Stocks, Faber says, should be bought after the sell off, as he expects a rally from there and through the remainder of the year.
Faber’s reasoning centers on negative sentiment regarding the growing reality of the need for QEII, which should precipitate the sell off in October as the coming economic data will confirm a weak economy in the U.S.
How low could stocks go? Faber doesn’t offer any precision, but will only say that he doesn’t see a threat to the March lows. On previous occasions Faber suggested that massive Fed stimulus has put a floor in for stocks and doesn’t see any changes in Fed policy regarding money printing if stocks tumble too far.
How much faith should we place on Faber’s views? It’s probably wise to keep anything Faber says in your mind. His record for market calls is considerably better than most market observers, and his reputation for being truthful with investors has made him an icon among skeptics of government and central bankers.
Faber was correct when he called the market low in March of 2009, pointing to record negative sentiment in stocks as the basis for his call. He also called the massive rally from the March low, which materialized splendidly for him. And his call in early September of this year, predicting that stocks should do well also came in for him.